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Worms turn election strategy, also business?

In a few hours, the United Kingdom will vote in the most closely fought election in years. The most memorable moments have been due to the introduction of the TV debates, and the now famous "worms" that accompanied the first one. Pundits delighted in showing how the audience reacted to favourably to Nick Clegg. After the debate, it became clear that the two main parties adapted their communication strategies based on the wavering red, blue and yellow lines on the screen.

In fact this continuous audience monitoring is not new.  Back in 1946, TIME magazine reported that the Gallup Handheld Hopkins Televoting device was wowing movie moguls in Hollywood (we wrote about it here). A handheld device allowed cinema-goers at preview screening to dial "like very much" or "very dull", which drew a red line on a chart as a staffer noted key scenes in the movie. Most films were not significantly altered but the reaction made a difference to the way they were marketed  (sounds like the politicians have been doing the same).

Dial M for Measurement

Customer feedback has also been used in business for years. Waiters have always asked diners what they thought of service. Unfortunately, "And how was the meal, sir?" is  just not a very scientific way of collecting feedback. Firstly, waiters can be quite intimidating, and secondly, you have a unreliable way of getting feedback to the proprietor. Like a turkey voting for Christmas, the server is hardly likely to admit "Customer says service was awful...".

To make feedback more scientific, companies have invested in consumer research - but it's expensive and can take time to process. Lack of common standards mean that one company's results are hard to compare to another. And small sample sizes (like in the TV Worm example) can result in error. Finally, customer feedback can end up in the "Market Research ghetto" - giving useful strategic information, but rarely used to solve operational customer issues.

Last weeks Economist magazine had an article on firms focusing on customers: "...shareholder value should give way to 'customer-driven capitalism' in which firms 'should instead aim to maximise customer satisfaction'. [...] Paul Polman [boss of Unilever] said 'I do not work for the shareholder, to be honest I work for the consumer, the customer'...". It is clearly becoming a boardroom priority - so how can business better tune into customer needs?

Many companies, including Philips, Vodafone, Canon and Electrolux have found the most effective method is real-time customer feedback through direct sales. Using a tool from CustomerGauge, these companies invite their online store to answer a one-page survey after each transaction, which asks for  feedback and a 0 - 10 recommendation rating. They have standardised on the Net Promoter (R) methodology, which is simple to communicate to front-line staff, and allows benchmarking against other companies. Between 10% and 30% of all customers respond, many with comments that are used to shape the business.

In doing so, they are getting real-time feedback with a numeric score they can systematically graph and track (like the worm) and written customer feedback they can match to that customers history. Recently, one of these companies responded to customer comments by changing packaging on products and printing manuals in larger type which had a positive effect on their Net Promoter Score. Another succesfully re-launched an almost forgotten product that was highly rated by customers, who were acting as evangelists and introducing friends. A recent CustomerGauge innovation is digital signage to show comments coming into the business as they happen.

These companies have already found best practices which include

  • responding to customer feedback within 24 hours (even the most unhappy clients respond positively to this)
  • routing comments to department managers (and more junior staff members who are empowered to solve problems)
  • and weekly review meetings where projects are reviewed a prioritised on the basis of customer sentiment.

The good news for customers is that real-time sampling of transactions like this is becoming more widespread, and businesses are waking up to its potential. Executives know customers can "sack" them and defect to the competition immediately. That is unlike the winning party on Thursday, which might be able to last around four years before being subjected again to the worm of customer opinion.

Next Up: Net Promoter News: Labor Finders work 63, JUNK clears 80, Schwab long on 46, NPS Comes out of Closet at 80

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